This is quite common, I think. I'm just coming out of a truly awful 2-3 years with my own DS1, who disengaged almost completely.
IMO, it happens if/when schools offer nothing that engages and enthuses young people. It seems to me to be a particular problem for creative, bright kids who learn best through doing rather than sitting still and listening. They get used to being bored and they are expected to tolerate it rather than do something about it. So they are effectively taught to disengage and be passive, and they come to believe that learning is boring and not for them.
I think bright kids are particularly confused by this, because on the one hand they know they're bright, but on the other hand they just can't sit still, listen and be satisfied with all that boring drivel their school experience... and they know they're disappointing people too. It's v bad for their self-confidence.
IME, they need to find something that inspires them or 'hooks' their attention. It doesn't matter what that is - anything that engages them is good. They can then un-learn the habits of switching off and tolerating boredom and doing nothing... And once they've re-learned how to be interested and engaged, they regain their motivation to achieve. :)
In our case, cutting off DS's money went hand-in-hand with further problems (incl. drug use and theft). It's impossible to say which came first, but money or lack of it was no part of the solution. Threatening to throw him out, and meaning it, got him back into college - which was definitely preferable to having him sitting around on the dole. But what finally changed things was when he got a place on a course he had actually chosen, doing something he liked - and it was (is) a BTEC - so he's learning practical skills and taking on real projects. This time last year he had narrowly avoided getting thrown out of a level 1 course and was planning a life on the dole. This year, he is doing well on a level 3 course, talking about uni, and has taken on a volunteer role putting his course skills into practice and getting relevant work experience for an extra 10-15 hours per week. :)
I'm getting a bit waffly, so I'll stop!
The headlines are...
Help him find something he WANTS to do, and
There IS hope! 